After making a new post crash high on Monday, the S&P500 gone wobbly over the past few days trading poorly alongside global equity markets, though U.S. markets are generally outperforming. The key must hold support level for S&P500 is now 1387, which is last Friday’s low and the 20-day moving average. If that breaks, the long awaited 5 percent correction to, say the 1340 support looks likely, though a bounce off the 50-day moving average at 1359 is certainly not out of the question.
It’s getting very difficult to navigate and divine markets that are so distorted by quonto easing and zero interest rate monetary policies. The alternative is to shut your eyes and go “balls to the wall” long with leverage. It would have payed better over the past few months and maybe that what the Fed wants, but it’s not our cup of tea. We like to worry.